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| ACQUISITIONS | 2. ACQUISITIONS TYR Acquisition On January 30, 2026, the Company completed the acquisition of TYR Tactical, LLC (“TYR”) including certain real estate property owned by an affiliate of TYR. The acquisition was accounted for as a business combination. Total acquisition-related costs for the acquisition of TYR were $5,622, of which $3,155 (including $2,000 paid to a related party as discussed in Note 12) was recognized during the three months ended March 31, 2026. Total consideration, net of cash acquired, was $185,200 for 100% of the equity interests in TYR. The total consideration was as follows:
The following table summarizes the total purchase price consideration and the preliminary amounts recognized for the assets acquired and liabilities assumed, which have been estimated at their fair values. The fair value estimates for the purchase price allocation are based on the Company’s best estimates and assumptions as of the reporting date and are considered preliminary. The fair value measurements of identifiable assets and liabilities, and the resulting goodwill related to the TYR acquisition are subject to change and the final purchase price allocation could be different from the amounts presented below. We expect to finalize the valuations as soon as practicable, but no later than one year from the date of the acquisition. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for the TYR acquisition is included in the Product segment and reflects synergies and additional legacy growth and profitability expected from this acquisition through expansion into new markets and customers.
In connection with the acquisition, the Company acquired exclusive rights to TYR’s trademarks, customer relationships, and product technologies. The amounts assigned to each class of intangible asset and the related average useful lives are as follows:
The full amount of goodwill is expected to be deductible for tax purposes. No pre-existing relationships existed between the Company and TYR prior to the acquisition. TYR revenue is included in the Product segment from the date of acquisition and amounted to $15,479 for the three months ended March 31, 2026. It is not practical to determine the amount of earnings related to TYR from the date of acquisition. The purchase agreement provided for the payment of contingent consideration of up to $8,333 per calendar year 2026, 2027, and 2028 based on the achievement of specified net revenue targets for each respective year. Using a , the Company estimated the fair value of the contingent consideration to be $4,080 as of January 30, 2026. Significant unobservable inputs used in the valuation include a of 8.0% and the probability adjusted net sales during the contingency periods. The contingent consideration liability is remeasured at the estimated fair value at the end of each reporting period with the change in fair value recognized within operating income in the condensed consolidated statements of operations and comprehensive income for such period. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. As the contingent consideration liability is remeasured to fair value each reporting period, significant increases or decreases in projected sales, discount rates or the time until payment is made could have resulted in a significantly lower or higher fair value measurement. Our determination of fair value of the contingent consideration liabilities could change in future periods based on our ongoing evaluation of these significant unobservable inputs. The following table summarizes the change in the TYR contingent consideration liability for the three months ended March 31, 2026:
The following unaudited pro forma results are based on the individual historical results of the Company and TYR, with adjustments to give effect as if the acquisition and borrowings used to finance the acquisition had occurred on January 1, 2025, after giving effect to certain adjustments including the amortization of intangible assets and inventory step-up, depreciation of fixed assets, interest expense, transaction costs, and taxes and assumes the purchase price was allocated to the assets purchased and liabilities assumed based on their fair market values at the date of purchase.
Zircaloy Acquisition On April 22, 2025, the Company completed the acquisition of Carr’s Engineering Limited (excluding Chirton Engineering) and Carr's Engineering (US), Inc. (collectively “Zircaloy”), each a subsidiary of Carr’s Group plc. Total consideration, net of cash acquired, was $89,590 for 100% of the equity interests in Zircaloy. The total consideration was as follows:
The following table summarizes the final purchase price consideration and the amounts recognized for the assets acquired and liabilities assumed, which have been estimated at their fair values. Since our initial purchase price allocation, we have increased goodwill by $5,644 for changes in assumptions used to fair value intangible assets, property, plant and equipment and deferred tax liabilities. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for the Zircaloy acquisition is included in the Product segment and reflects synergies and additional legacy growth and profitability expected from this acquisition through expansion into new markets and customers.
In connection with the acquisition, the Company acquired exclusive rights to Zircaloy’s trademarks, customer relationships, and product technologies. The amounts assigned to each class of intangible asset and the related average useful lives are as follows:
The full amount of goodwill is expected to be non-deductible for tax purposes. |
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